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Agri-environmental schemes in the European Union: the role of ex ante costs

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  • Peerlings, Jack H.M.
  • Polman, Nico B.P.

Abstract

The purpose of this paper is to analyse land allocation between competing agri-environmental contracts taking into account institutional issues and farm household and farm characteristics. We consider a Biodiversity Protection Contract, Landscape Management Contract and a Restriction on Intensive Practises Contract. The paper shows that it is important to study the choice for an agrienvironmental contract in combination with the choice for other agri-environmental contracts. The reasons being that a unit of land can only be allocated to one contract (although a farm can select more than one contract) and perceived relative marginal costs of contracts can change if institutional settings and farm household and farm characteristics alter. The model uses a two stage method. In the first step the probability of contract choice is determined. In the second stage these probabilities are linked to ex ante costs (including transaction costs) and optimal contract choice is determined.

Suggested Citation

  • Peerlings, Jack H.M. & Polman, Nico B.P., 2008. "Agri-environmental schemes in the European Union: the role of ex ante costs," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6698, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa107:6698
    DOI: 10.22004/ag.econ.6698
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    References listed on IDEAS

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    1. Bob Crabtree & Neil Chalmers & Nicola‐Jo Barron, 1998. "Information for Policy Design: Modelling Participation in a Farm Woodland Incentive Scheme," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(3), pages 306-320, September.
    2. Gerard Wynn & Bob Crabtree & Jacqueline Potts, 2001. "Modelling Farmer Entry into the Environmentally Sensitive Area Schemes in Scotland," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(1), pages 65-82, January.
    3. Adam Ozanne & Tim Hogan, 2001. "Moral hazard, risk aversion and compliance monitoring in agri-environmental policy," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 28(3), pages 329-348, October.
    4. Jack Peerlings, 2004. "Wildlife and landscape services production in Dutch dairy farming; jointness and transaction costs," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 31(4), pages 427-449, December.
    5. Isabel Vanslembrouck & Guido Van Huylenbroeck & Wim Verbeke, 2002. "Determinants of the Willingness of Belgian Farmers to Participate in Agri‐environmental Measures," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(3), pages 489-511, November.
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    Keywords

    Agricultural and Food Policy; Environmental Economics and Policy; Land Economics/Use;
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